Cautious optimism in IMF global economic outlook

The International Monetary Fund’s (IMF) most recent World Economic Outlook Update sees global growth increasing to 3.5% in 2013.

Emerging economies continued to drive growth during Q3 of 2012 with the US economy chipping in more than the IMF had anticipated. US economic growth is forecast to average 2% in 2013 and is expected to “rise above trend in the second half of the year.” The tone of the outlook is cautious, however, as significant downside risks remain in both the US and the euro area.

The update calls for urgent policy action in advanced economies: sustained fiscal consolidation and financial sector reform will reduce the downside risks and support global economic recovery.

According to the outlook, China’s growth will hit 8.2% in the coming year. Yet only increased private consumption and market-oriented structural reforms will sustain this rapid economic growth.